Steve Kovach July 27, 2016 at 02:20PM
Apple's most important product, the iPhone, is in a decline for the first time in its nine-year history. That has everyone wondering what Apple can build next to inject some excitement back into the company's products.
The Apple Watch, while it makes a nice accessory, clearly isn't it.
So, what is?
For obvious reasons, Apple never talks in concrete terms about what it's cooking up in its R&D labs, but executives do like talking vaguely about the areas they'd like to tackle next. (Remember when CEO Tim Cook said "the wrist" was an "interesting" place for a new computing product in 2013, over a year before the Apple Watch was formally unveiled?)
We got more of that Tuesday during Apple's earnings call. Cook dropped two big hints on the areas Apple would like to break into next. Let's unpack it.
Augmented reality
Augmented reality is a close cousin of virtual reality. It means overlaying digital images on top of the real world. If you've been playing "Pokémon GO" or used Snapchat's lenses, then you've already experienced AR to some degree.
So what does Apple have planned?
On the call, Tim Cook responded to a question about the "Pokémon GO" phenomenon and how that informs Apple's plans for AR. Here's Cook, according to a transcript of the call put together by iMore. Emphasis mine:
...It also does show, as you point out, that AR can be really great and we're — we have been and continue to invest a lot in this. We are high on AR for the long run. We think there's great things for customers and a great commercial opportunity. So we're investing, and the number one thing is to make sure our products work well with other developers' kind of products like Pokémon...
Here's how I read that: Apple will make sure its current products are able to support AR apps like "Pokémon GO" (which isn't a new thing at all, by the way, just a statement that Apple is on top of the current buzzy trend in phone apps), while investing in new types of AR products in the future.
We already know Apple has hundreds of people researching AR and VR, as The Financial Times reported earlier this year. What that research results in could be anyone's guess, but we do know all of Apple's major competitors from Microsoft to Google, along with startups like the ultra-secretive Magic Leap are working on their own takes on wearable AR glasses.
It'll likely be several years before anything comes out of Apple's AR and VR research, but it's clear now that Apple is taking the category very seriously.
Cars and transportation
This spring, Apple made a surprise $1 billion investment in Didi Chuxing, an Uber-like car service based in China. It was a rare move for a company that usually snaps up smaller companies for a few million dollars without much fanfare.
Here's how Cook explained Apple's investment strategy when asked about it during the earnings call Tuesday, emphasis mine again:
...we're constantly looking on the outside for great talent and great intellectual property. And we have been buying companies on average every three or four weeks. And we continue to do that and we think we've made some really great choices there. In terms of the investment in Didi, it was an unusual investment in that — as you know — we don't have a long history of doing a lot of these, but we have done some before. We invested in ARM in the early days, we invested in Akamai and a few other companies. It wasn't the first. From a Didi point of view we see that as 1.) A great financial investment, 2.) We think that there's some strategic things that the company can do together over time and 3.) We think that we'll learn a lot about the business and the Chinese market even beyond what we currently know and Didi has an incredible team there.
At this point, it'd be nearly impossible for Apple to build a car service company a la Uber or Didi from scratch. The Didi investment gives Apple a unique insight into the transportation world as it works on its own car, which is expected to come out by 2021. This is the closest thing to a confirmation Cook has given so far about Apple's plans for a car.
What happened to TV?
If you had asked me two years ago what big product category Apple would break into next, I would've said television. In 2014, shortly after launching the iPhone 6 and the announcing the Apple Watch, Cook started testing a new line, saying TV was "stuck in the 70s," implying that Apple had a better solution coming soon.
Those hints started to take shape in the following months once we learned Apple was planning to launch a streaming TV service by the end of 2015. But the deals it needed to lock up never went through, and we just got a new Apple TV box open to third-party app developers instead. The new Apple TV is nice, but it's clearly not the revolution Apple pitched. Instead, Apple spends more time talking about the future of TV instead of actually building it.
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Tim Cook gave two hints about what Apple will build next (AAPL) from Business Insider: Steve Kovach
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